FBI questioning Miers'tie to lottery scandals

Jerome R. Corsi, a Harvard Ph.D., is a WND senior staff writer. He has authored many books, including No. 1 N.Y. Times best-sellers "The Obama Nation" and "Unfit for Command." Corsi's latest book is "Partners in Crime."

WND has learned that the FBI has begun asking questions about Harriet Miers and the Texas Lottery scandals while she was Lottery chairperson.

Lawyers and investigative staff for the Senate Judiciary Committee are scheduled to follow-up Monday with the letter GTECH is preparing to free Larry Littwin to speak with the committee without violating the gag order imposed on him by GTECH in the $300,000 settlement of his wrongful termination federal lawsuit.

Were crimes committed in the Texas Lottery scandals – crimes that involved Harriet Miers, possibly even Gov. George Bush and top advisers to the governor, in a criminal conspiracy to cover-up? A lot of GTECH money changed hands around the country, much of it in Texas. Former Lt. Gov. Ben Barnes received $23 million to be bought out of his GTECH contract after a memo from federal prosecutors basically accused him of participating in a kickback scheme that sent GTECH’s national sales manager to federal prison. And George Bush paid Harriet Miers’ law firm thousands of dollars to investigate the National Guard story that Barnes was circulating during the 1994 gubernatorial firm.

With the Senate Judiciary Committee talking to Larry Littwin about testifying, the cat is getting out of the bag. Littwin is the ex-director of the Texas Lottery who was fired by the Texas Lottery Commission in 1997 after he began digging into which politicians and state officials were involved in Barnes’ web of political influence buying that secured for GTECH their lucrative Texas contract.

These are the five key questions that need to be asked:

1. Who told Executive Director Linda Cloud to close the competitive bidding process and stop looking for a GTECH replacement?

On Feb. 19, 1998, Linda Cloud, the Texas Lottery director who replaced Larry Littwin after he was fired, announced her decision to end the competitive bidding process, deciding to stick with GTECH and ignore the lower-priced competitive bids then on the table. The Texas Lottery Commission – which included Chairperson Harriet Miers and former Texas Supreme Court Justice John Hill – never voted on the decision. Since that day, many in Texas have suspected that the order came from the governor’s office and were delivered to Cloud by one of Gov. Bush’s closest advisers.

2. Why were the criminal kickback allegations made against Ben Barnes by the New Jersey federal prosecutors in the J. David Smith sentencing process never investigated by the FBI or Texas law enforcement authorities?

WND can find no evidence that the Texas Lottery Commission, any Texas law enforcement authorities, or the FBI ever investigated the charges made when U.S. Attorney Faith Hochberg of Newark allowed on Jan. 15, 1997, the pre-sentencing memo to be made public. The memo specifically charged that Ben Barnes had kicked back to a Kentucky company – owned by Smith’s wife – over $500,000 from the GTECH revenue deposited to Barnes’ bank account. At the time, Assistant U.S. Attorney Kimberly Guadagno, who prepared the document for Hochberg, told the Austin American-Statesman, “New Jersey is coordinating with Texas. It would be irresponsible for me to throw out a document like this without letting Texas know about it.”

3. Did GTECH violate Texas state laws by making contributions to political campaigns in Texas in direct violation of the terms of GTECH’s contract with the Texas Lottery Commission?

A key sentence in GTECH’s contract with the Texas Lottery Commission restricted the company from making political contributions to Texas politicians or state officials. The Dallas Morning News reported on Sept. 19, 1997, that the newspaper had obtained documents confirming that Littwin had ordered Lottery security staffers to examine the campaign finance reports of 30 then-current or former state officials, including former Democratic Gov. Ann Richards. Littwin’s search went back to 1989, two years before the Texas Legislature voted to create the lottery.

Gov. Bush called Littwin’s investigation “overzealous.” Karen Hughes, the governor’s spokesperson told the newspaper that Gov. Bush was upset with Littwin and that the governor hoped “that this was a situation of someone who was new to Texas being overzealous in trying to inform himself about the history of the lottery.” WND has learned that when Littwin was fired, the Lottery Commission, including Miers and Hills, made sure that his investigation was terminated, all according to the directives of Gov. Bush’s office. Why was Littwin’s investigation stopped?

4. While Harriet Miers was chairperson of the Texas Lottery Commission from 1995 to 2000, was any official audit ever conducted, as required by Texas lottery law?

On Sept. 2, 1997, the San Antonio Express-News reported that the newspaper had obtained a 63-page report prepared by State Auditor Lawrence Alwin that was planned for release that week. The newspaper reported that the auditor’s office had completed a 16-month investigation of the Texas Lottery Commission and the report was critical:

Lax control and supervision by state lottery officials of private contractors hired to run the games has left the appearance of impropriety, state auditors say.

– San Antonio Express-News, Sept. 2, 1997

Was the state auditors’ report – harshly critical of the Texas Lottery Commission under Miers – ever released to the public? Before he was fired, Larry Littwin and Lottery general counsel Kim Kiplin met privately with Gov. Bush and brought to his personal attention that no official audit had been conducted and published since the inception of the Lottery in 1992, despite the requirement of the Texas law.

When Larry Littwin was fired, he tried to release an audit report that claimed the Lottery Commission had “ripped off” the Texas public. Littwin tried to release this report on the day he was fired. According to the Houston Chronicle of Nov. 23, 1997, Littwin was blocked from releasing the report by a threatening letter delivered to him by the Lottery Commission, warning him that he would be charged with legal action if he made any Lottery documents public. According to the newspaper, Lottery staff then began videotaping even informal meetings that Littwin held with reporters after his termination.

5. Was Ben Barnes involved in a “blueprint” scandal of political influence buying and money laundering that GTECH replicated in several states while Harriet Miers was chairperson of the Texas Lottery Commission?

The central charge of the pre-sentencing report released by federal prosecutors in New Jersey was that the criminal pattern of moving money around – that J. David Smith developed with Ben Barnes – was the “blueprint” for the criminal activity that had been used by GTECH’s national sales manager around the country. WND can find no evidence that Texas law enforcement authorities or the Texas Lottery Commission ever investigated these allegations, as they applied to Barnes and the network of political influence he allegedly bought with GTECH money in the time period under examination.

Federal Election Commission reports indicate Barnes has made generous contributions to the campaigns of Judiciary Committee members Sens. Kennedy, Schumer and Leahy, as well as to Democratic presidential hopefuls Sens. Kerry and Clinton. The next week should be interesting. If Harriet Miers’ nomination is not withdrawn, the process of asking questions may only be beginning.